East Asia and Pacific remains the world’s growth engine despite a challenging external environment, with developing economies growing by 7.2% in 2013. The proportion of people living in poverty in the region has steadily declined—less than 10% of the population lives on $1.25 a day—but much more needs to be done as there are still close to half a billion people living on $2 a day.
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This report assesses Vietnam's
corporate governance policy framework. It highlights recent
improvements in corporate governance regulation, makes
policy recommendat... Show More +ions, and provides investors with a
benchmark against which to measure corporate governance in
Vietnam. It is an update of the 2006 Corporate Governance
ROSC for Vietnam. Good corporate governance enhances
investor trust, protects minority shareholders, and
encourages better decision making and improved relations
with workers, creditors, and other stakeholders. Better
investor protection can lower the cost of capital and
encourage companies to list and raise funds through equity
markets. Good corporate governance also helps to ensure that
these companies operate more transparently and efficiently.
Vietnam has undertaken important corporate governance
reforms in recent years. However protecting minority
shareholders, fully tapping the potential of capital
markets, and professionalizing boards and management will
require that reform continues. Key reforms include:
Developing an action plan to address core failings of state
owned enterprise corporate governance, including replacing
the current state economic groups, or SEG oriented system
with one that has more accountable state ownership; and
Increasing transparency with greater auditor independence,
better disclosure of ownership and control, and convergence
of accounting standards with International Financial
Reporting Standards, or IFRS. Show Less -

This report assesses Thailands
corporate governance policy framework. It highlights recent
improvements in corporate governance (CG) regulation, makes
policy recom... Show More +mendations, and provides investors with a
benchmark against which to measure corporate governance in
Thailand. It is an update of the 2005 Corporate Governance
Report on the Observance of Standards and Codes (CG ROSC).
Good corporate governance enhances investor trust, protects
minority shareholders, and encourages better decision making
and improved relations with workers, creditors, and other
stakeholders. Better investor protection can lower the cost
of capital and encourage companies to list and raise funds
through equity markets. It is crucial to protect retirement
savings invested in listed companies. Good corporate
governance also helps to ensure that these companies operate
more transparently and efficiently. Show Less -

This report assesses Ghanas corporate
governance policy framework. It highlights recent
improvements in corporate governance regulation, makes
policy recommendatio... Show More +ns, and provides investors with a
benchmark against which to measure corporate governance in
Ghana. It is an update of the 2005 Corporate Governance
ROSC. Good corporate governance enhances investor trust,
helps to protects minority shareholders, and can encourage
better decision making and improved relations with workers,
creditors, and other stakeholders. Better investor
protection can lower the cost of capital and encourage
companies to list and raise funds through equity markets.
Investor protection is also crucial to protect retirement
savings as pension funds invest more in listed companies.
Good corporate governance also helps to ensure that these
companies operate more transparently and efficiently. Show Less -

This report assesses Indonesia's
corporate governance policy framework. It highlights recent
improvements in corporate governance regulation, makes
policy recommend... Show More +ations, and provides investors with a
benchmark against which to measure corporate governance in
Indonesia. It is an update of the 2004 corporate governance
ROSC. Good corporate governance enhances investor trust,
helps to protect minority shareholders, and can encourage
better decision making and improved relations with workers,
creditors, and other stakeholders. It is an important
prerequisite for attracting the patient capital needed for
sustained long-term economic growth. Indonesia has
undertaken important reforms in recent years. However, fully
tapping the potential of capital markets and
professionalizing boards and management will require that
reform continues. Key reforms include: better regulation of
ownership disclosure and other nonfinancial disclosure;
requiring key shareholder rights be incorporated into
company articles; making more effective use of independent
commissioners and audit committees; and amending company law
to better protect shareholders. Show Less -

This Corporate Governance Report on the
Observance of Standards and Codes (CG ROSC) report reflects
technical discussions with a number of private and public
sector... Show More + institutions, as well as other relevant stakeholders,
whom the World Bank would like to thank for their time and
invaluable insight into corporate governance practice in
Mongolia. Much has been achieved by the Mongolian government
to improve the legal and regulatory framework for corporate
governance. The Financial Regulatory Commission (FRC)
approved the Mongolia Corporate Governance Code for publicly
listed companies (MCGC) in 2007, the Bank of Mongolia (BoM)
launched a set of corporate governance regulations for
banks, and a number of amendments were made to modernize the
company law, with further amendments planned for the
securities law. This CG ROSC benchmarks Mongolia's
legal and regulatory framework, practices, and enforcement
framework against the Organization for Economic Co-operation
and Development (OECD) principles of corporate governance
(OECD Principles), the international reference point for
good corporate governance. This CG ROSC was commissioned by
the Economic Policy Committee of the Mongolian Parliament.
The primary target audience of this CG ROSC is the
government of Mongolia and those responsible for setting
corporate governance policy. Other stakeholders, in
particular investors and companies themselves, can benefit
from this report as well in terms of assessing and
implementing good corporate governance. Show Less -

This report provides an assessment of
Vietnam's corporate governance framework - its laws and
regulations, supervisory and enforcement mechanisms, and the
market en... Show More +vironment, with particular attention to the
securities markets. The report highlights the following key
issues: a)The framework for corporate governance in Vietnam
is in the early stages of development, with laws and
regulations being established; b)A high degree of
informality still exists in the corporate sector, with an
unofficial securities market that is significantly larger
than the formal market, and there remains a large presence
of state ownership in enterprises; c)Institutions
responsible for regulation, enforcement, and development of
the capital market have limited capacity and resources.
Among other key issues: investor protection is inadequate,
related-party transactions are pervasive, compliance with
accounting standards is insufficient, and disclosures of
quality information are limited. The report gives a summary
of observance of OECD Corporate Governance Principles. Going
forward, Vietnam faces significant challenges in the
development of its capital market and promotion of good
corporate governance. The report identifies key measures
that should be taken, including the following: Strengthening
the role and capacity of the securities market regulator;
Setting the framework and standards that apply to the
informal securities market; Issuing guidelines for
implementation of laws and regulations, including a code of
corporate governance for listed firms; Bolstering
enforcement of regulatory compliance; building awareness and
training of corporate directors in corporate governance
issues; and Encouraging better quality, timeliness, and
access to information. Show Less -

This report provides an assessment of
the corporate governance framework in the Philippines-its
laws and regulations, supervisory and enforcement
mechanisms, and th... Show More +e market environment, with particular
attention to the securities markets. The report gives
several recommendations at to how to strengthen the
Philippine corporate governance. This include: the
strengthening of the enforcement of the existing laws and
regulations; improving the protection of minority
shareholder rights through better enforcement; strengthening
monitoring of compliance with IAS/IFRS and requiring
additional disclosure of internal controls and governance
issues by listed firms; enhancing Philippines Stock
Exchange's surveillance system for monitoring of
unusual trading activities; and encouraging the development
of advocacy institutions to promote minority shareholders rights. Show Less -

This ROSC assessment of corporate
governance in Malaysia benchmarks law and practice against
the OECD Principles of Corporate Governance, and focuses on
listed comp... Show More +anies. Important corporate governance reforms
have been implemented in Malaysia since 1998, when a
high-level Finance Committee on Corporate Governance,
consisting of both government and industry, was formed to
identify and address weaknesses highlighted by the Asian
financial crisis. Key reforms have included the development
of a comprehensive master plan to further develop the
capital market, the demutualization of Bursa Malaysia,
introduction of a Code of Corporate Governance, and changes
in the composition and role of its Board of Directors. In
2004, disclosure rules and corporate whistleblower
protections were strengthened. In 2005, major reforms
commenced to overhaul government-linked corporations (GLCs).
The report stresses that in order to further improve its
corporate governance practices, Malaysia faces the following
challenges: the government's level of equity ownership
remains large; free float remains low; and directors'
accountability and protection for minority shareholders need
further improvement. In addition, the role of institutional
investors and shareholder activism in the corporate
governance framework needs to be strengthened. This report
identifies several key measures that focus on enforcement
and implementation, including: Continued and consistent
enforcement of disclosure and reporting requirements by the
Securities Commission, with a focus on quality of
information provided; Implementation of legislative reform
to strengthen directors' independence and
accountability to investors; and Development of a legal
basis for and promotion of an active institutional investor community. Show Less -

Since 1998, significant corporate
governance reforms have been introduced and are underway,
including reforms in the structure and function of the board
of director... Show More +s of listed companies, the establishment of the
Thai Institute of Directors Association and the Department
of Special Investigation, the adoption by the Stock Exchange
of Thailand (SET) of 15 principles of good corporate
governance, and draft legislation to reinforce the rights of
minority shareholders. In addition, the Securities and
Exchange Commission (SEC) has improved its monitoring of
financial statements of listed companies and stepped up
enforcement efforts and increased sanctions for violations.
Most recently, the SEC has supported issuance of a
Directors' handbook and the establishment of a Director
Registry System. The Institute of Certified Accountants and
Auditor of Thailand (ICAAT) also has intensified its efforts
to improve skills and knowledge of accountants and auditors.
Reforms in the legal framework have been slow and need to be
expedited. There is a lack of a range of sanctions,
criminal, civil, and administrative to facilitate effective
enforcement. International financial reporting standards
have yet to be adopted. The private sector's awareness
of the potential benefits of improved corporate governance
may need to be further enhanced. Further steps need to be
taken to enhance protection of shareholder rights, including
the introduction of cost effective legal channels for
shareholders seeking redress. The focus should remain on
implementation and on completing the legislative and
regulatory agenda, improving enforcement (prosecution
process), enhancing financial reporting and disclosure
consistent with international standards, and promoting
business ethics and best practices. Show Less -

In reforming its corporate governance,
and in establishing a rule-based business culture, Indonesia
faces many challenges. The key challenges are as follows.
Enforc... Show More +ement of laws and regulations needs to be
strengthened. Administrative sanctions for violation of
securities or disclosure rules may not be adequate. Efforts
should be expended to ensure that corporate officials in the
position of trust are held accountable when they violate the
law. Sanctions should go beyond fines, and the incentive
system should be changed so that violators are truly
discouraged, and good corporate behavior is promoted. This
requires strengthening enforcement capacity of Bapepam for
securities violations, and its independence as the
securities regulator. The Company Law should explicitly
refer to the fiduciary duties of directors and managers for
violation of securities laws. Current efforts to amend the
Company Law need to be expedited. Further efforts should
also be expended to develop alternative (non-judiciary)
mechanisms, such as shareholder activism, for encouraging compliance. Show Less -

Since 1998, Korea has taken important
steps to address the weaknesses that contributed to the
economic crisis of 1997. The corporate governance framework
has been s... Show More +trengthened significantly. The reform agenda,
however, remains unfinished and the equity markets relative
to other OECD countries remain underdeveloped. There has
been good progress in upgrading accounting and auditing
standards and practices, as well as strengthening underlying
institutions responsible for setting standards and ensuring
compliance. The Financial Supervisory Commission/Financial
Supervisory Services have been established, and the role of
the Korean Institute of Certified Public Accountants has
been strengthened. Efforts should continue to further
improve accounting standards and improve accounting and
auditing practices, and include measures to clarify and
strengthen the role and function of audit committees
consistent with international best practices; replace
statutory auditors with audit committees for smaller
companies over time; and upgrade the skills and knowledge of
audit committee members. While holding companies are
allowed, only several of them have been established. In
order to improve transparency and disclosures of
chaebol-affiliated operations, consider several measures
including measures that may change the incentives for large
chaebol to establish holding companies (e.g. lower taxes).
While significant improvements have been made to increase
minority shareholder rights (e.g., by lowering or
eliminating threshold ownership requirements) and the ease
with which shareholders exercise those rights, further
improvements are required, including measures to allow
minority shareholders a greater voice in the selection of
directors and steps to improve the process for nominating
independent directors. While derivative actions are allowed,
these are costly and therefore have been limited so far to
only a few. The redress available to shareholders if their
rights are violated remains limited, and there is no
cost-effective way for them to seek redress. The draft law
submitted to the National Assembly allowing class action
lawsuits should be enacted as soon as possible. Securities
laws have been amended to require listed companies to have
outside directors. However, the concept of independent
(outside) directors is new and still not well rooted in
Korea. Additional efforts could include measures to expand
the fiduciary duty of directors to shareholders and make it
explicit under the law, and to limit liability of
independent directors in cases in which they have acted in
good faith. Show Less -